John D. Boyd | Mar 18, 2010 4:14PM EDT
The Association of American Railroads quickly pushed back Thursday against the Chlorine Institute after the chemical shippers’ group urged regulators to fix a “faulty” study over the costs and benefits of a new rail equipment mandate.
Congress in 2008 ordered the railroads to develop and deploy by the end of 2015 crash-avoidance systems called positive train control, systems that can also remotely stop a train if necessary. The Federal Railroad Administration in January issued an implementing rule, which included an estimate of costs far above the value of the benefits it listed.
Rail officials said the study shows PTC costs to carriers outweigh the benefits. Shippers of highly toxic chemicals now fear they will be saddled with higher rates to cover much of the PTC costs, since freight railroads must use it where they haul such chemicals or share tracks with passenger trains.
The institute this week officially asked the FRA to re-issue its regulation and update its analysis, this time by including a number of potential benefits the shippers identified.
AAR President and CEO Edward Hamberger said “the Chlorine Institute is attacking the FRA's cost-benefit analysis of PTC as a smoke screen to hide the fact that their shipments will raise the cost of rail transportation for all customers.”
He said the “FRA's examination of the costs versus the benefits of PTC clearly shows that there are no present business benefits to the railroads. In fact, the cost-benefit carries an inverse relationship of 20 to one. The FRA estimates the costs of installing PTC to be $10 to $13 billion over 20 years with about a $500 million safety benefit."
The institute also said it commissioned its own study that showed billions of dollars in PTC efficiency benefits for railroads. But the AAR said more than 80 percent of the touted gains come from increasing train speed and thereby raising effective capacity, and disputes that conclusion.
“PTC will not increase capacity and train speed; instead, it will likely reduce both,” the rail lobby said, adding that current PTC gear can’t stop a train as precisely as a skilled locomotive engineer.
The AAR repeated its call for chlorine shippers and similar customers to pursue product substitution and other measures to reduce the potential public exposure of hauling those cargoes.
See also “Shippers Seek New Analysis of Rail Technology”
Contact John D. Boyd at jboyd@joc.com.
